Global Liquidity Updates

Global liquidity increased by $136B last week.

Central banks are taking a cautious approach, contributing to slower growth.

The 3-month RoC has not yet crossed the 12-month RoC, but signs of an uptick are visible.

Despite the $136B increase however, overall growth remains slow due to the following factors: the MOVE index, a steady US Dollar (DXY), and rising oil prices.

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Another recorded decrease in global liquidity.

Our RoC calculation is also not showing any signs of a positive trend yet.

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Several components have led to this, with the main one being the Reverse Repo Program (RRP), which has absorbed an additional $243B in liquidity.

This also explains the Federal Reserve's net liquidity decline over the past two weeks.

We're not yet in a positive liquidity regime.  

However, with the RRP at $664B and the TGA at $765B, you should prepare for a wild ride once Yellen and Powell decide to drain these liquidity pools.

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Added Text:

Right around when our team published the weekly update for global liquidity, the RRP reported a $212B drop and is now sitting at $451B.

It appears that banks are moving funds they had parked for end-of-quarter reporting back into the market.

With 67 counterparties withdrawing funds, it's the largest outflow since January 2nd.

Banks are now using the reserves they built up for the end of the quarter, temporarily boosting market liquidity.

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We’re excited to share our first official Global Liquidity update.

After working on this for quite some time, we believe it's finally time to share this alpha with our followers.

Over the past month, liquidity net value has been trending lower, contributing to the recent drop in Bitcoin.

A reading of the 3-month > 12-month would suggest a potential new uptrend in liquidity.

However, we believe it will take some time until this happens.

Historically, this metric has been very accurate in determining Bitcoin's next trend.

Stay tuned for more updates as we continue to monitor and analyze these trends.

We'll be sharing this data on a weekly basis moving forward.